Bretton Woods II: Scrap the Unholy Trinity - the IMF, the World Bank and the WTO
The 'Bretton Woods II' conference in Washington in a couple of weeks' time looks set to be as irrelevant as President Bush. There'll doubtless be a lot of hand-wringing about the Unholy Trinity of the International Monetary Fund (IMF), World Bank and World Trade Organization (WTO). To judge by their performance to date on the economic meltdown, they look just about as relevant as President Bush.
Lamentably enough, however, they're a good deal more dangerous than that, because they may not be pensioned off. They should now accompany Bush into disgraceful retirement.
So pernicious has been the influence of the IMF that no country with any choice in the matter will go anywhere near it. Those that have no choice (Iceland, Ukraine, Hungary so far) find themselves forced into perverse policies in exchange for 'assistance'. The Fund has already announced that it will only deal with countries that have been obedient to its rules. These are aimed at supporting not the people of the countries it deals with but the interests and the ideology of the very same private financial institutions that have driven the world down the road to ruin. The Fund is completely unaccountable and must be scrapped.
The World Bank's appalling history of large-scale, corporate-friendly, environmentally destructive and utterly incompetent projects beggars belief. That it has been charged with funding the global response to climate change is bad news for the climate. It can only be explained by the absence of anything better.
The WTO knows of no other purpose than the pursuit of trade 'liberalization'. In the world of financial services where the WTO also has a keen interest that translates as irresponsible deregulation, of precisely the kind that almost everyone now agrees lies behind the financial meltdown. Translated back into what's so touchingly referred to as the 'real economy', trade liberalization has no different effect from deregulation in finance. The WTO trade 'round' is currently stalled it would save everyone a lot of grief if it were simply left to expire altogether.
Scrapping the Holy Trinity does not necessarily mean there's no useful function at all for such 'multilateral' institutions though entirely detached from the UN, as they are at present, their usefulness is strictly questionable. Certainly, that element of their power that derives from their unaccountability must be removed. Quite what would then remain is a matter for debate.
There could, indeed, be a need for some sort of international currency, other than the US dollar. Certainly, the worldwide consensus on regressive taxation, which the IMF has done so much to promote, must be broken immediately. Certainly, there's an imperative to scrap 'Third World' debt NOW. None of this will be done, however, without scrapping the IMF first.
There is, certainly, an urgent need to finance sustainable development, but the World Bank clearly has no idea what that means.
And there is, certainly, a need to extend the principles of fair trade into world trade. The transnational corporations that like world trade precisely because they control more than two-thirds of it already have more than enough power as it is. If there were such a thing, a World Fair Trade Organization would promote the interests that transnational corporations don't and can't. The tired old contradiction between 'free trade' and 'protectionism' is utterly barren, spurious and outdated. Climate change is, if nothing else, changing the landscape of trade as well.
Lest we forget, the Unholy Trinity is composed of publicly funded institutions. Yet they are publicly unaccountable. So they are worse than useless. There is, for example, absolutely no prospect of reaching the UN Millennium Development Goals by 2015 (or, indeed, ever) while they remain in place. Likewise with repairing climate change.
The time is long overdue for a clean start.
The NI magazine for December is just being completed. It will have a big feature on the 'meltdown' and the first, positive outlines (such as the Beijing Declaration) of what we're calling a 'Clean Start'. Now that the 'real economy' is going into recession, with a full-blooded slump on the cards, there's a terrible inevitability about the catastrophe striking hardest at the Majority World. We'll do our best, in the magazine and on this website, to keep you abreast of developments.